The CXT token will be gradually used to remove the need for the Covalent team to be a key player for the management, storage, and relaying of data on the network, by allowing holders to vote on network features. Instead, we will have an ecosystem of multiple data-providers and a variety of data queried through the network without a single party deciding on it (for the avoidance of doubt, the right to vote is restricted solely to voting on features of the Covalent Network; the right to vote does not entitle CXT holders to vote on the operation and management of any entity developing the Network, its affiliates, or their assets, and does not constitute an equity interest in any of these entities). This is part of the reason why we give tokens to vendors on the network that provide data during the initial phases of the project. By incentivizing those that are net beneficial to the network, we are curating a community of the world’s best data-vendors to manage the Covalent Network.

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Pitching a Covalent Network Improvement Proposal

When submitting a proposal, please refer to the template outlined below. Proposals could include but are not limited to:
  • Indexing a blockchain
  • Adding a specific protocol endpoint
  • Research ideas for Alpha Alarm
  • Suggestions to the Alchemist Program
  • Participating in different farming/staking programs
  • Developer adoption and marketing initiatives, such as running hackathons and localization of content
Proposals that will not get accepted:
  • Listing on exchanges
  • Token burning
  • Anything that could cause others harm and/or that is illegal

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Governance Forum Template

The proposal you are submitting should include the following:
  • A concise title
  • Author(s) (Twitter IDs)
  • Background (Tell us about yourself and your interests in writing the proposal)
  • Date
  • Summary (A synopsis of the item for the Covalent Network to consider)
  • Mission and Value Alignment (The expected benefit to the Network)
  • Financial Implication (The expected cost to the Network or resources that may be required)
  • Poll (Using the Discourse poll feature)

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Proposal Consensus Levels

The consensus levels for a specific proposal move from one stage to the next. First, the proposer writes the proposal on our Governance Forum, followed by a proposal voting in the Covalent Discord server. Based on the responses and soft votes on the forum as well as Discord, the Covalent team will decide to take the proposal to Snapshot for final approval/voting. To summarize:
  • Governance Forum (Discourse Votes): Consensus Level = Gauging Support
  • Discord Votes: Consensus Level = Confirmed Support
  • Snapshot Votes: Consensus Level = Final approval

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Creating a Proposal

The threshold to create a proposal at the moment is 5000 CXT. However, to bootstrap the initial governance process only whitelisted members (Covalent team) will be able to create proposals on Snapshot.

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Voting Power

In order to vote on the given proposal, you need to have a sufficient amount of CXT to add in your vote. The voting power for Governance V1 is 1 CXT = 1 Vote. Your CXT will stay in your wallet. You will only have to sign the vote (transaction) on Snapshot. It also means you do not have to spend on the gas fees.

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Quorum

The minimum quorum for the proposal to pass will be defined by following:
  • Greater than (>) 55% vote approval
  • A minimum of 10000 votes
All the governance proposals that go on Snapshot will get 2 to 6 days to vote. If the above quorum is reached after the stipulated time, Covalent will execute the vote in accordance with the majority.
NOTE: The CXT tokens need to be in the wallet before the proposal goes live on Snapshot as defined by the block # for the proposal. If you buy CXT or transfer CXT to the wallet after the proposal goes live, you won’t be able to vote on that proposal.